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Nigeria companies improved financial health indicates they are able to fulfil their interest obligations while reducing default risk on existing debt.
Of course, the healthy balance –sheets is also supported by strong sales growth underpinned by price adjustments to compensate for rising input costs at the zenith of inflationary pressures.
The combined revenue of non-financial firms stood at N23.25 trillion as at September 2025, which is 35.15 percent higher than 2024’s N17.20 trillion.
To avoid locking in high borrowing costs companies were increasingly opting to issue short-term debt.
Companies’ debt metrics remain healthy and well within covenant thresholds, and there are no threat to going concerns.
The interest coverage ratio for non-financial companies on the NGXASI index stood at 12.42 in the first nine months of 2025, substantially higher than 2024’s 6.35, according to data from MoneyCentral.
The figure is a measure of a company’s ability to repay its debts, with a ratio of at least 2 generally considered the minimum acceptable amount for a company with solid revenues. Analysts typically prefer a coverage ratio of 3 or higher.
A company capable of generating earnings well above its interest expense can withstand financial hardships.
The improved financial health among companies comes as the central bank is gradually ending its tightening circle given easing inflationary pressures.
Normally, higher interest rates are seen as hampering growth for firms, as they raise borrowing costs for business expansion.
Nigeria’s inflation continued its deceleration, moderating to 16.1 percent year-on-year (YoY) in October compared to 18.0 percent in the prior month, according to the latest CPI data released by the National Bureau of Statistics (NBS).
In response to sustained disinflation recorded in the past five months, Apex bank has cut the Monetary Policy Rate (MPR) by 50 basis points to 27 percent from 27.5 percent, and analysts expect more rate cuts next week.
Nigeria’s economy expanded 4.23 percent in the second quarter, as a revival in oil production complemented a surge in services.
The yield on Nigeria 10Y Bond Yield held steady at 15.30% on November 18, 2025. Over the past month, the yield has fallen by 0.28 points and is 5.52 points lower than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity.
The combined finance costs of listed non-financial firms increased by a mere 4.45 percent to N1.32 trillion as at September 2025 from N1.26 trillion as at September 2024.
It is important to note that 16 out the 30 firms analysed saw a reduction in finance costs, according to data compiled by MoneyCentral.
Unilever Nigeria Plc interest coverage ratio improved to 42.88 in September 2025 from 3.4; its interest expense was down 75.86 percent to N710 million in the period under review from N2.94 billion the previous year.
Dangote Sugar Refinery interest coverage ratio increased to 149.73, from 6.92 the previous year; the largest producer of the sweetener saw a 54.11 percent reduction in finance costs to N541.79 million in September 2025.
MTN Nigeria coverage ratio increased to 13.44 in September 2025 from 3.63 as at September 2024; the telecommunication giants interest expense on loans dipped by 18.03 percent to N107.25 billion as at September 2025.
Okomu Oil’s interest coverage ratio improved to 37.26 September 2025, from 4.71 as at September 2024; its finance costs reduced by 73.49 percent to N2.31 billion as at September 2025.
Lafarge Africa interest coverage ratio stood at 55.30 as at September 2025, from 3.56; the producer of the building material’s interest expense on loan fell by 85.24 percent to N5.39 billion.
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